Identify All Debt
Take the time to identify all of your debt. This includes looking at equipment leases, business credit card debt, mortgages, and anything else that you pay on a monthly basis. You should create a spreadsheet that identifies the balance as well as what your monthly payment is.
The benefit to doing this is that it will allow you to see just how much debt you have incurred and what you can afford. It will make it easier as you start work on a debt workout plan and make settlements.
Know What You Can Afford
Determine what you can actually afford. It is a good idea to work with an accountant so that you know what your money is coming in and what you can afford to pay out. Particularly when you have had investments go south, you might have less money than what you initially thought. Additionally, you might have some money that will allow you to settle some older debt.
By knowing what you can afford on a monthly basis, it will allow you to settle certain debts faster. It will also allow you to contact creditors in order to work out various payment plans and settlements that work more effectively within your budget.
Deal with the Creditors Directly
It’s important for you to deal with creditors directly. If you work with collection agencies, they may not be able to provide you with the best financial opportunities for your business. The collection agencies are generally working under the direction of the creditors.
Additionally, you want to make sure that you are dealing with creditors as opposed to companies that will help you to navigate collections. The reason for this is because they will often drive down your business credit score, which can be detrimental to your business moving forward.
Get All Settlements in Writing
Any debt settlement that you get should be in writing. If you negotiate with a creditor that will lower your debt to a certain amount, be sure to ask for it in physical form. Whether they are lowering your debt or reducing your payments, you need to have it in writing so that there are no questions about it down the road.
Even though you might talk to someone on the phone who is telling you that they will settle a debt or lower the debt amount, you cannot be sure that the company as a whole has chosen to accept the settlement until you see it on paper. Many companies will send the documentation via email or send it in the mail.
Work with a Knowledgeable Consultant
Debt workout plans and settlement deals can help to save your business. It will allow you to get back on track financially and overcome various obstacles. You do not need to try and do everything on your own. One of the best tips is to work with a company that can help you understand the financial state of your business and what workouts can be done based on the level of debt that you are currently in.
Additionally, a consultant can help you with investments and financial updates that will prevent you from experiencing financial turmoil in the future.
Contact Apollo Consulting today to learn more about how to deal with debt settlement and workout plans.